Aphria, Aurora look to ride marijuana rush with jump to Wall Street

With cannabis now legal in Canada, some of the country ’s major pot companies are looking to ride the green rush all the way to Wall Street.

On Thursday, Leamington, Ont.-based licensed cannabis producer Aphria Inc. submitted its registration to list its shares on the New York Stock Exchange, making it the second major Canadian producer to pursue a listing on the NYSE this month.

Aphria’s bid followed that of Aurora Cannabis, which announced Thursday that its shares will begin trading on the NYSE as of Oct. 23 after receiving approval, and earlier moves to secure U.S. listings by Canopy Growth Corp. and Cronos Group Inc.

B.C.-based Tilray Inc., meanwhile, skipped a Canadian listing altogether and made its initial public offering on the Nasdaq exchange in New York in July.

In the cases of Cronos and Tilray, share prices almost immediately skyrocketed, with Tilray surging as high as US$300 in September after listing at just US$17 two months earlier.

According to Paul Rosen, CEO of Tidal Royalty, which invests in U.S. cannabis companies, Wall Street not only opens these firms to a new pool of investors but grants them a chance to stand out from competitors.

“These companies are in a Texas cage match level of competition among each other,” said Rosen, who is also the former CEO of Cronos. “They’re all following a successful path laid down by others ... to increase their ability to raise capital from multiple sources and ultimately lower their cost of capital, which would be a competitive advantage to their peers who are not able to cross over through the gatekeeper of the U.S. exchange.”

In order to be able to make the move into Wall Street, these companies need to prove with an application that they ’re not violating U.S. federal laws, which do not allow cannabis to be imported into the U.S.

The U.S. is expected to follow Canada’s lead and legalize pot in every state — which Rosen expects will happen within four years. If it does, he suggests the U.S. market will become the “largest durable cannabis economy that will ever ferment.” After Aphria and Aurora, he says CannTrust Holdings and HEXO Corp. could be next.